DON’T FORGET: The tax deadline is fast approaching. Contact us to get started on your return today.

cscanlan@integrityaccountinggroup.com

Blog

Learning Center

We keep you up-to-date with all the latest tax news and changes in the industry.

Tax Consequences of Giving Your Employees a Holiday Gift

Article Highlights:

  • De Minimis Fringe Benefits 
  • Cash Gifts 
  • Gift Certificates 
  • Group Meals 
  • FICA and Wage Withholding 
It is common practice this time of year for employers to give employees gifts. Where the gift is infrequently offered and has a fair market value so low that it is impractical and unreasonable to account for it, the gift’s value would be treated as a de minimis fringe benefit. As such it would be tax-free to the employee and tax deductible by the employer.

A gift of cash, regardless of the amount, is considered additional wages and subject to employment taxes (FICA) and withholding taxes. Caution: if the gift recipient is a W-2 employee, the employer may not issue them a 1099-MISC for a holiday gift of cash; the amount must be treated as W-2 income. Where an employer gives gift certificates, debit cards or similar items that are convertible to cash, the value is considered additional wages regardless of the amount. However, if the gift is a coupon that is nontransferable and convertible only into a turkey, ham, gift basket, or the like at a particular establishment, the gift coupon would not be treated as a cash equivalent.

Holiday group meals, cocktail parties, picnics or the like for employees are also treated as de minimis fringe benefits.

If you have questions about holiday gifts to employees, please give this office a call.



Share this article...

Sign up for our newsletter.

Each month, we will send you a roundup of our latest blog content covering the tax and accounting tips & insights you need to know.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

We care about the protection of your data.

Sign up for our newsletter

Each month, we’ll send you a roundup of our latest blog content covering the tax and accounting tips & insights you need to know.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

Get in Touch with Integrity Accounting

You can count on us for professional, timely and reliable tax and accounting services. If you’re ready to get started, just fill out this form and we’ll be in touch.

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

Connect with us

You can count on us for professional, timely and reliable tax and accounting services. You can find us at:

28 Schenck Parkway Building 2B Suite 200, Asheville, North Carolina
(443) 914-0252

Please Leave Us A Review